While reading this morning I found Brian Feroldi over at The Motley Fool. I expected a follow-on this week's news that Walmart failed to post annual sales growth for the first time since the company went public 45 years ago. That wasn't what I found however in 3 Dividend Aristocrats We Will Never Buy. Feroldi writes:
One of the ways that companies reward their long-term shareholders is by paying out a dividend. Some of the best companies out there not only do so on a regular basis but also increase their payout year after year, thereby turbocharging their shareholders' total return. Wall Street has created a special name for any company that is able to increase its dividend for 25 years straight. These companies are known as "Dividend Aristocrats", and becoming a member of this elite group is rare, especially in today's ultra-competitive environment. Companies that are able to join this list tend to be some of the most stable and reliable long-term stocks out there. But just because a stock has managed to become a Dividend Aristocrat doesn't mean it's automatically a great buy. For that reason, we asked our team of Motley Fool contributors to highlight a company from the Dividend Aristocrat list that they would never want to own. Read below to see which stocks they picked.
Of course, Walmart leads the list. Quoting fellow fool Jamal Carnette:
Before investing, it pays to take heed of the common warning: Past performance does not predict future success. That particular warning is apt in the case of Wal-Mart Stores. After declaring its first annual dividend of $0.05 in March 1974, the company has increased its payout every year thereafter to its current total of $2.00 annually, providing income investors with annualized dividend growth of 9%. If you were one of the few prescient investors to buy the stock at its IPO price of $16.50 per share and had the foresight to hold the position through 11 2-for-1 stock splits, you'd be sitting on a gain of nearly 8,500%. During that time frame,its store count grew from 51 U.S.-based locations to 11,527 retail units with more than half being international. However, these locations are more likely to become liabilities rather than assets in the upcoming years. Recently, Wal-Mart was subject to negative press when the company announced it would close 269 stores, 154 in the United States alone, the majority of which were the smaller-format Walmart Express. Ironically, Wal-Mart now finds itself victim to the same forces it used to demolish mom-and-pop retailers on its rush to top retailer [Emphasis mine, JH]: superior logistics and a relentless focus on lower prices. While Wal-Mart was focused on keeping costs (including labor) low and building new storefronts, online retailer Amazon perfected the online shopping channel and shipping logistics. Forrester Research estimates online shopping is increasing in scope and predicts 9.5% annualized growth through 2019 as more consumers shift to online channels.
I've long been an advocate of the idea that Walmart, like every empire---political, economic or otherwise---must fall to the ravages of the new kids on the block. Going all biblical isn't my normal mode, but in this case I can't help mayself: Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap. (Galatians 6:7) Jeff Hess: Have Coffee Will Write.

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